Gas supply ‘crisis’ imminent,
officials warn

GAS DAILY - Monday, May 12, 2003

      The United States is facing a severe gas shortage as restricted access to new supplies hampers production and short-term imports of liquefied natural gas fail to meet demand, officials at a Washington, D.C., conference warned Friday.
      Given production declines in existing wells over the past 12 years, combined with limited access to new producing basins, “we’re headed toward a critical gas shortage in the next three to five years,” said Stephen Adik, vice chairman of NiSource.
      Because lawmakers usually only respond to a crisis, “I don’t think Congress will open up new basins soon enough” to avoid significant shortfalls, Adik told the Power Industry Forum sponsored by Infocast.
      “LNG is not going to get us over the hump in the next three to four years” because proposed new terminals will take several years to be constructed, added Christopher Helms, president and CEO of pipeline unit CMS Panhandle.
      Helms agreed with Adik that the United States has a lot of gas supplies that are offlimits to drilling due to environmental and other concerns, and “it’s going to take some political backbone” to change that.
      Recalling restrictions on gas use for electricity generation in the 1970s, Helms wondered whether those days would return and if policymakers will “destroy the gas industry again.”
      Adik mentioned that the coal industry has been arguing that with gas prices climbing so high, gas is becoming too costly a commodity to use as a generating fuel.   TT